Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Was on the buyside for 15 years, most recently at a medium-sized boutique asset management firm. I grew up in Europe, went to university in the US and have been living in Singapore for the last 7 years which has given me a broad scope on the world and investing in general.

Consider myself a generalist investor with a preference for small and mid-cap companies and special situations. However, a large cap that has gone temporarily out of favor might also pique my interest. 

My style of investing could be categorized as more of value investor, rather than growth at any cost. Learning from Charlie Munger on the importance of quality of a company has been of tremendous value over the years.I like businesses with real earnings, cash flows, dividends, book value and insider ownership.

Insight Provider

Sunpower: 2023 China Re-Opening Stock, but CB Conversion Uncertainty Needs To Be Resolved

Sunpower: Extension of CB's Puts Focus Back on GI Business Fundamentals

Sunpower: Resilient Growth Story; Direct Competitor IPO's in China and Highlights Sunpower Value

Sunpower: Good FY20 Figures; Now in Transition to 100% GI by 2H21. Risk/Reward Highly Attractive

Sunpower: Ex-Dividend Date Coming Soon; 100% GI Should Lead to Re-Rating; Fair Value Remains $1.38

M&S Div. Sold Resulting in 28% Special Dividend; Company Now 100% GI Story; Fair Value To 1.42 SGD

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/sunpower-group-ltd" target="_blank" data-smartkarma-citation="entities:18395:1" rel="noopener">Sunpower Group (SPWG SP)</a> last week reported 1H21 results which were its last results as an integrated M&amp;S/GI business. As discussed at length in previous insights the focus will now shift solely to GI.GI is underappreciated by investors as essentially this is a monopoly business with 30-year contracts where customers pay upfront. There is an automatic tariff increase mechanism in case key-input costs rise. The customer base of Sunpower is very diversified and should perform well in expansionary or recessionary environments (see sample set below). <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/224/266/original/image_74418366751629184318462.png?1629184301" class="editor-image img-responsive" data-smartkarma-image-id="224266"></figure>On the conference call management remained very bullish for 2H21 and 2022. It also started showing "total steam sales volume" which is a metric unique to the GI business. We suspect investors will like this metric and we look forward to further transparency into 3Q21.One remarkable feat in the new presentation deck was the emphasis on ESG and the adjacent areas of water and soil pollution. Other than its historical air pollution mandate this could become a growth area going forward should opportunities arise.Fair Value at 1.18 SGD, after adjusting for recent 0.2359 SGD special dividend payments. This fair value estimate is based on 20x FY22 EPS. Given the highly recurring cash flow of the GI business we think this is a reasonable multiple on a monopoly-style business. Upside (+84%) remains attractive from current 0.64 SGD level.

Sunpower Group (SPWG SP) last week reported 1H21 results which were its last results as an integrated M&amp;S/GI business. As discussed at length in previous insights the focus will now shift solely to GI.GI is underappreciated by investors as essentially this is a monopoly business with 30-year contracts where customers pay upfront. There is an automatic tariff increase mechanism in case key-input costs rise. The customer base of Sunpower is very diversified and should perform well in expansionary or recessionary environments (see sample set below). On the conference call management remained very bullish for 2H21 and 2022. It also started showing "total steam sales volume" which is a metric unique to the GI business. We suspect investors will like this metric and we look forward to further transparency into 3Q21.One remarkable feat in the new presentation deck was the emphasis on ESG and the adjacent areas of water and soil pollution. Other than its historical air pollution mandate this could become a growth area going forward should opportunities arise.Fair Value at 1.18 SGD, after adjusting for recent 0.2359 SGD special dividend payments. This fair value estimate is based on 20x FY22 EPS. Given the highly recurring cash flow of the GI business we think this is a reasonable multiple on a monopoly-style business. Upside (+84%) remains attractive from current 0.64 SGD level. 

Sunpower: Full Steam Ahead with GI; 84% Upside to 1.18 SGD Fair Value